Increased Popularity of FHA Mortgages

A recent survey by Zillow.com found that more than one-third of buyers plan to make down payments of less than 10 percent, while nearly a fifth don't plan to make a down payment. Since loans insured by the Federal Housing Administration (FHA) only require a 3.5 percent down payment, these loans have risen in popularity among buyers. Last month, applications for government-insured mortgages rose to its highest level since November 1990, accounting for nearly 36 percent of all mortgage applications, according to the Mortgage Bankers Association. In 2005, the share of government-insured mortgages stood at less than 6 percent.
But we do seem to be turning a corner on sales of higher priced homes that need a larger down payment, reflecting the fact that jumbo loans are getting slightly easier to obtain.